In future, the PRA says it will expect banks to “provide more detailed evidence to justify exclusion” when they decline to designate senior staff as material risk takers. This applies in particular to high earners (see the table below) and to traders. In the past, banks have tried to argue that traders in areas like FX aren’t material risk takers because they’re operating under value-at-risk limits, says the PRA. These arguments will no longer hold.

Justifying the fact that highly paid employees are not MRTs:

Source: PRA

2. You’ll still be able to escape the existing bonus rules if you work for a small firm

As we’ve noted before, the UK bonus rules don’t apply to so-called “Tier 3” firms, defined as those with assets of less than £15bn. This has enabled banks like Jefferies to pay huge all cash bonuses in London. The PRA said today that the tier 3 exemption still stands.

3. You won’t be able to escape the bonus rules if you swap jobs midway through the year

If you swap jobs into an MRT role, or are promoted into an MRT role midway through a year, you won’t be able to escape the bonus rules. As long as you’re in your new job for more than three months they will still apply proportionately.

4. If you change employer and have your stock bought out, that stock can now be subject to clawback if necessary

Lastly, the PRA has changed the bonus rules concerning clawback of stock paid by previous employers. “The new rule on buy-out bonuses is designed to stop employees from being able to wipe the slate clean by changing jobs,” says Alexandra Beidas, a partner at Linklaters. “Bought out awards will no longer be immune from forfeiture or clawback for actions at the previous firm. If a former employee is found to have misbehaved, committed a material error or material failure of risk management his former firm will be able to request his new employer to forfeit or clawback his bought out awards.”

This is good in theory, but it could lead to problems in practice. Current employers who are asked to clawback bonuses issued by previous employers may not be entirely impartial.